Chairman of the Charity Tax Group (CTG), John Hemming, wrote to the Chancellor in March requesting immediate support for charities through the tax system during the pandemic, and including a number of proposals including to allow charities to keep Gift Aid for cancelled events. This proposal has been supported by a number of CTG members including the Arts Council.
The proposal suggested that:
“On an exceptional basis, for the duration of the coronavirus crisis, HMRC should allow Gift Aid to be eligible on any refund donated to charities in lieu of cancelled tickets or debts not to be collected. While Gift Aid would not ordinarily be eligible on such gifts this would help to recognise the generosity of the British public and incentivise them to not seek refunds from charities, which are already struggling with cashflow issues. The amount being gifted is clearly a donation and freely given and no benefit is being granted to them as the event has been cancelled. There is precedence for such a mechanism through the Retail Gift Aid scheme and this would be a quick and effective measure in support of charities and donors.”
In a response to a Parliamentary Question last week, the Government indicated that it will allow this in respect of theatres and other cultural venues, and CTG is now liaising with HMRC and DCMS to confirm the details with the hopes of the Government allowing more charities to benefit.
In his response, Lord Agnew of Oulton said:
“Theatres and other cultural venues recognised as charities by HMRC can claim Gift Aid on freely given donations, as opposed to payments for goods or services; such as admission tickets. These charities can claim Gift Aid on the value of tickets for cancelled events if the patrons have agreed not to be refunded for the cost of the ticket and agree for the same amount to be treated as a donation. Additionally, the charity will also need to make sure the patrons have made a Gift Aid declaration for their donations to qualify for Gift Aid, confirming that they have, or will have, paid enough tax to cover the amount the charity will claim on their donations.”
John Hemming, Chairman of the Charity Tax Group commented:
“CTG welcomes the announcement that the Government will allow theatres and other cultural venues to keep Gift Aid for cancelled events. CTG is liaising with HMRC and DCMS, as well as affected charities, to confirm the scope and mechanics of using Gift Aid in this way, as it should hopefully have a broader application to all charity events disrupted by COVID-19. Our hope is that the system will be as easy and frictionless as possible, with guidance issued quickly to ensure charities can benefit from this Gift Aid as soon as possible.”
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